India’s business activity has witnessed an upsurge, reaching its highest level in almost 14 years. This surge in economic activity is attributed to robust demand, leading to increased new orders and fueling output growth.
The flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global and HSBC, reached 62.2 in April, surpassing the March reading of 61.8. The index has consistently remained above the 50-mark since August 2021, indicating a sustained expansionary trend.
The services sector led the growth, with the PMI rising to a three-month high of 61.7 in April. This increase was driven by an acceleration in new business, a key indicator of demand. The manufacturing sector also maintained its strength, with the PMI holding steady at 59.1, indicating continued growth in output and new orders.
International demand remains robust, with the composite sub-index for new export orders reaching its highest level since it was introduced in September 2014. This suggests that India’s exports are continuing to perform well in the global market.
Despite the strong growth, input costs for both goods producers and service providers eased in April. However, strong demand allowed businesses to pass on some of these costs to customers. Manufacturing firms reported a stronger increase in output costs, while the rise in costs was slower in the services industry.
Sustained demand also fueled job growth, particularly in the manufacturing sector, which saw the fastest pace of job creation in one-and-a-half years. However, employment generation in the services sector was slightly slower than in March.
The strong economic performance positions India favorably to maintain its status as the fastest-growing major economy in 2022, continuing the trend of strong expansion witnessed over recent quarters.
